Traders’ body the Confederation of All India Traders (CAIT) has complained to Commerce & Industry Minister Piyush Goyal against alleged violations of the Foreign Exchange Management Act (FEMA) rules by e-commerce firm Amazon and has said that the Enforcement Directorate must take strict action against it.

In a letter to the Minister dated November 4, CAIT alleged that Amazon, through Amazon India, had put in place illegal, pre-determined structures with pre-agreed arrangements with ‘nominated retailers’ covering pricing, exclusive tie-ins, deep discount offers, etc, in violation of the FEMA Regulations and FDI rules (Press Note 2), which govern e-commerce market-place entities.

CAIT also questioned Amazon’s investments in Indian companies and alleged that it was to enter into and carry on multi-brand retail trading (MBRT) activities surreptitiously.

“The objective of the FEMA Rules is to ensure regulation and oversight of the Government of India in various sectors including MBRT. This sector provides livelihood to crores of Indians (from MSME manufacturers of retail goods to the neighbourhood ‘kiranas’ that serve the end-consumer) and members of our association. We have been heavily impacted by the prevalence and business of multinational conglomerates like Amazon, which have virtually unlimited financial resources and a track record of destroying indigenous businesses in markets where they operate by selling low cost and low quality imported goods and pricing local sellers out of the market,” the letter from CAIT National Secretary General Praveen Khandelwal said out.

The ED must take strict action against Amazon for its “brazen violations’’ which should include imposition of maximum penalties, the letter added.

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